IT Tech Packaging, Inc. Announces Third Quarter 2022 Unaudited Financial Results

BAODING,China,Nov. 11,2022 --IT Tech Packaging,Inc. (NYSE American: ITP) ("IT Tech Packaging" or the "Company"),a leading manufacturer and distributor of diversified paper products inNorth China,today announced its unaudited financial results for the three and nine months ended September 30,2022.

Mr. Zhenyong Liu,Chairman and Chief Executive Officer of the Company,commented,"Due to the sporadic situation of COVID-19 in China,the operation of our factory facilities is highly restricted during the three months ended September 30,2022. However,we still achieved a positive profit year-on-year growth rate of 53% despite facing a volatile commodity price environment impacting our operating costs and the COVID-19 pandemic lockout policies limiting our factory facilities operations. On the strategic front,we continued to deliver high-quality products to our customers,strengthen our business operation,optimize the product portfolio,and seek significant economic benefits. Consistent with our stated strategy,we continued to utilize excess cash flow in a balanced way to make investments in our long-term strategic growth initiatives and to further strengthen the balance sheet. Looking forward,we are committed to creating value for its customers,employees,shareholders,partners,industry,and society by seizing new opportunities and diversifying businesses."

Third Quarter 2022 Unaudited Financial Results

For the Three Months Ended September 30,

($ millions)

2022

2021

% Change

Revenues

31.71

45.09

-29.7%

Regular Corrugating Medium Paper ("CMP")*

26.06

31.20

-16.5%

Light-Weight CMP**

5.30

6.13

-13.6%

Offset Printing Paper

-

4.80

-100.0%

Tissue Paper Products

0.29

2.81

-89.6%

Face Masks

0.06

0.15

-62.6%

Gross profit

2.78

1.82

52.8%

Gross profit (loss) margin

8.8%

4.0%

4.8 pp****

Regular Corrugating Medium Paper ("CMP")*

10.9%

2.9%

8.0 pp****

Light-Weight CMP**

12.8%

5.6%

7.2 pp****

Offset Printing Paper

-

16.2%

-16.2 pp****

Tissue Paper Products***

-258.5%

-8.7%

-249.8 pp****

Face Masks

29.6%

20.4%

9.2 pp****

Operating loss

-0.59

-0.20

-197.3%

Net income (loss)

-1.89

1.54

-222.3%

EBITDA

2.43

5.32

-54.4%

Basic and Diluted loss per share

-0.03

0.03

-200.0%

* Products from PM6

** Products from PM1

*** Products from PM8 and PM9

**** pp represents percentage points

Revenue decreased by 29.7% toapproximately $31.71 million,mainly due to the decrease in sales volume of CMP,offset printing paper and tissue paper products.

Gross profit increased by 52.8% toapproximately $2.78 million. Total gross margin increased by 4.8 percentage point to 8.8%.

Loss from operations wasapproximately $0.59 million,compared to loss from operations ofapproximately $0.20 millionfor the same period of last year.

Net loss wasapproximately $1.89 million,or loss per share of $0.03,compared to net income ofapproximately $1.54 million,or earnings per share of $0.03,for the same period of last year.

Earnings before interest,taxes,depreciation and amortization ("EBITDA") was approximately $2.43 million,compared to$5.32 million for the same period of last year.

Revenue

For the third quarter of 2022,total revenue decreased by 29.7%,toapproximately $31.71 millionfromapproximately $45.09 millionfor the same period of last year. This was mainly due to the decrease in sales volume of regular CMP,offset printing paper and tissue paper products.

The following table summarizes revenue,volume and ASP by product for the third quarter of 2022 and 2021,respectively:

For the Three Months Ended September 30,

2022

2021

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Regular CMP

26,063

59,848

435

31,201

61,947

504

Light-Weight CMP

5,296

12,507

423

6,127

12,497

490

Offset Printing Paper

-

-

-

4,795

7,045

681

Tissue Paper Products

293

260

1,128

2,812

2,646

1,063

Total

31,652

72,615

436

44,935

84,135

534

Revenue

($'000)

Volume

(thousand

pieces)

ASP

($/thousand

pieces)

Revenue

($'000)

Volume

(thousand

pieces)

ASP

($/thousand

pieces)

Face Masks

57

1,282

44

152

3,180

48

Revenue from CMP,including both regular CMP and light-Weight CMP,decreased by 16.0%,toapproximately $31.36 millionand accounted for 98.9% of total revenue for the third quarter of 2022,compared toapproximately $37.33million,or 82.8% of total revenue for the same period of last year. The Company sold 72,355 tonnes of CMP at an ASP of$433/tonne in the third quarter of 2022,compared to 74,444tonnes at an ASP of$501/tonne in the same period of last year.

Of the total CMP sales,revenue from regular CMP decreased by 16.5%,toapproximately $26.06 million for the third quarter of 2022,compared to revenue ofapproximately $31.20 million for the same period of last year. The Company sold 59,848 tonnesof regular CMP at an ASP of$435/tonne during the third quarter of 2022,compared to 61,947 tonnes at an ASP of$504/tonne for the same period of last year. Revenue from light-weight CMP decreased by 13.6%,toapproximately $5.30 million for the third quarter of 2022,compared to revenue ofapproximately $6.13 million for the same period of last year. The Company sold 12,507 tonnes of light-weight CMP at an ASP of$423/tonne for the third quarter of 2022,compared to 12,497 tonnes at an ASP of$490/tonne for the same period of last year.

Revenue from offset printing paper was $nilfor the third quarter of 2022,compared to revenue ofapproximately$4.80 millionfor the same period of last year.

Revenue from tissue paper products decreased by 89.6%,toapproximately $0.29 million for the third quarter of 2022,fromapproximately$2.81 millionfor the same period of last year. The Company sold 260tonnesof tissue paper products at an ASP of$1,128/tonne for the third quarter of 2022,compared to 2,646 tonnes at an ASP of$1,063/tonne for the same period of last year.

Revenue from face masks decreased by 62.6%,toapproximately $0.06 millionfor the third quarter of 2022,from $0.15 million for the same period of last year. The Company sold 1,282 thousand pieces of face masks for the third quarter of 2022,compared to3,180 thousand pieces of face masks for the same period of last year.

Gross Profit and Gross Margin

Total cost of sales decreased by 33.1%,toapproximately $28.93 millionfor the third quarter of 2022 fromapproximately $43.27 millionfor the same period of last year. This was mainly due to the decrease in sales quantity of regular CMP,offset printing paper and tissue paper products,and the decrease in material costs of CMP. Costs of sales per tonne for regular CMP,light-weight CMP,offset printing paper,and tissue paper products were$388,$369,$nil and$4,042,respectively,for the third quarter of 2022,compared to $489,$463,$570and$1,155,for the same period of last year.

Total gross profit wasapproximately $2.78 millionfor the third quarter of 2022,compared to the gross profit ofapproximately $1.82 millionfor the same period of last year as a result of factors described above. Overall gross margin was 8.8% for the third quarter of 2022,compared to 4.0% for the same period of last year. Gross profit(loss) margins for regular CMP,tissue paper products and face mask products were 10.9%,12.8%,nil%,-258.5% and 29.6%,compared to 2.9%,5.6%,16.2%,-8.7% and 20.4%,for the same period of last year.

Selling,General and Administrative Expenses

Selling,general and administrative expenses ("SG&A") increased by 66.9%,toapproximately $3.37 millionfor the third quarter of 2022 fromapproximately $2.02millionfor the same period of last year.

Loss from Operations

Loss from operations wasapproximately $0.59 millionfor the third quarter of 2022,a decrease of 197.3%,from loss from operations ofapproximately $0.20 millionfor the same period of last year. Operating loss margin was 1.9% for the third quarter of 2022,compared to operating loss margin of 0.4% for the same period of last year.

Net Loss

Net loss wasapproximately $1.89 million,for the same period of last year.

EBITDA

EBITDA wasapproximately $2.43 millionfor the third quarter of 2022,compared toapproximately $5.32 millionfor the same period of last year.

Note 1: Non-GAAP Financial Measures

In addition to our U.S. GAAP results,this press release includes a discussion of EBITDA,a non-GAAP financial measure as defined by the Securities and Exchange Commission ("SEC"). The Company defines EBITDA as net income before interest,income taxes,depreciation and amortization. EBITDA is a key measure used by management to evaluate our results and make strategic decisions. Management believes this measure is useful to investors because it is an indicator of operational performance. Because not all companies use identical calculations,the Company's presentation of EBITDA may not be comparable to similarly titled measures of other companies,and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with the U.S. GAAP.

Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)

For the Three Months Ended September 30,

($ millions)

2022

2021

Net income (loss)

-1.89

1.54

Add: Income tax

0.43

-0.07

Net interest expense

0.26

0.28

Depreciation and amortization

3.63

3.57

EBITDA

2.43

5.32

Nine Months Ended September 30,2022 Unaudited Financial Results

For the Nine Months Ended September 30,

($ millions)

2022

2021

% Change

Revenues

78.98

115.83

-31.8%

Regular Corrugating Medium Paper ("CMP")*

65.02

78.42

-17.1%

Light-Weight CMP**

12.66

16.44

-23.0%

Offset Printing Paper

-

14.10

-100.0%

Tissue Paper Products

1.10

6.49

-83.0%

Face Masks

0.20

0.39

-48.7%

Gross profit

3.73

6.68

-44.2%

Gross profit (loss) margin

4.7%

5.8%

-1.1 pp****

Regular Corrugating Medium Paper ("CMP")*

7.2%

5.0%

2.2 pp****

Light-Weight CMP**

9.2%

7.3%

1.9 pp****

Offset Printing Paper

-

17.5%

-17.5 pp****

Tissue Paper Products***

-193.6%

-14.4%

-179.2 pp****

Face Masks

25.7%

17.0%

8.7 pp****

Operating loss

-4.78

-0.49

-874.2%

Net loss

-4.66

-3.25

-43.5%

EBITDA

7.18

2.69

166.91%

Basic and Diluted loss per share

-0.07

-0.06

-16.7%

* Products from PM6

** Products from PM1

*** Products from PM8 and PM9

**** pp represents percentage points

Revenue

For the nine months ended September 30,2022,total revenue decreased by 31.8%,toapproximately $78.98millionfromapproximately $115.83 millionfor the same period of last year. This was mainly due to the decrease in sales volume of corrugating medium paper ("CMP") and offset printing paper and tissue paper products. The following table summarizes revenue,volume and ASP by product for the nine months ended September 30,2022 and 2021,respectively:

For the Nine Months Ended September 30,

2022

2021

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Regular CMP

65,015

139,036

468

78,417

156,080

502

Light-Weight CMP

12,660

27,990

452

16,437

33,658

488

Offset Printing Paper

-

-

-

14,095

20,602

684

Tissue Paper Products

1,103

1,040

1,061

6,491

5,963

1,089

Total

78,778

168,066

469

115,440

216,303

534

Revenue

($'000)

Volume

(thousand

pieces)

ASP

($/thousand

pieces)

Revenue

($'000)

Volume

(thousand

pieces)

ASP

($/thousand

pieces)

Face Masks

201

4,295

47

392

9,650

41

Revenue from CMP,decreased by 18.1%,toapproximately $77.68 millionand accounted for 98.3% of total revenue for nine months ended September 30,compared toapproximately $94.85 million,or 81.9% of total revenue for the same period of last year. The Company sold 167,026tonnes of CMP at an ASP of$465/tonne in nine months ended September 30,compared to 189,738tonnes at an ASP of$500/tonne in the same period of last year.

Of the total CMP sales,revenue from regular CMP decreased by 17.1%,toapproximately $65.02 million for nine months ended September 30,compared to revenue ofapproximately $78.42million for the same period of last year. The Company sold 139,036tonnesof regular CMP at an ASP of$468/tonne during the nine months ended September 30,compared to 156,080 tonnes at an ASP of$502/tonne for the same period of last year. Revenue from light-weight CMP decreased by 23.0%,toapproximately $12.66 million for the nine months ended September 30,compared to revenue ofapproximately $16.44 million for the same period of last year. The Company sold 27,990 tonnes of light-weight CMP at an ASP of$452/tonne for the nine months ended September 30,compared to 33,658 tonnes at an ASP of$488/tonne for the same period of last year.

Revenue from offset printing paper was $nilfor the nine months ended September 30,compared to revenue ofapproximately$14.10 millionfor the same period of last year. The Company sold 20,602 tonnes of offset printing paper at an ASP of$684/tonne in the nine months ended September 30,2021.

Revenue from tissue paper products decreased by 83.0%,toapproximately $1.10million for the nine months ended September 30,fromapproximately$6.49 millionfor the same period of last year. The Company sold 1,040 tonnes of tissue paper products at an ASP of$1,061/tonne for the nine months ended September 30,compared to 5,963 tonnes at an ASP of$1,089/tonne for the same period of last year.

Revenue from face masks decreased by 48.7%,toapproximately $0.20 millionfor the nine months ended September 30,from $0.39 million for the same period of last year. The Company sold 4,295 thousand pieces of face masks for the nine months ended September 30,compared to 9,650 thousand pieces of face masks for the same period of last year.

Gross Profit and Gross Margin

Total cost of sales decreased by 31.1%,toapproximately $75.25 millionfor the nine months ended September 30,2022 fromapproximately $109.15 millionfor the same period of last year. This was mainly a result of the decrease in sales volume of CMP and offset printing paper and decrease of material costs of CMP. Costs of sales per tonne for regular CMP,offset printing paper and tissue paper products were$434,$411,$nil and$3,114,for the nine months ended September 30,compared to $477,$453,$565 and$1,245,for the same period of last year.

Total gross profit wasapproximately $3.73millionfor the nine months ended September 30,compared to the gross profit ofapproximately $6.68 millionfor the same period of last year as a result of factors described above. Overall gross margin was 4.7% for the nine months ended September 30,compared to 5.8% for the same period of last year. Gross profit(loss) margins for regular CMP,tissue paper products and face mask products were 7.2%,9.2%,-193.6%,and25.7%,compared to 5.0%,7.3%,17.5%,-14.4% and 17.0%,general and administrative expenses ("SG&A") increased by 19.1%,toapproximately $8.54 millionfor the nine months ended September 30,2022 fromapproximately $7.17millionfor the same period of last year.

Loss from Operations

Loss from operations wasapproximately $4.78 millionfor the nine months ended September 30,a decrease of 874.2%,from loss from operations ofapproximately $0.49 millionfor the same period of last year. Operating loss margin was 6.1% for the nine months ended September 30,compared to operating loss margin of 0.4% for the same period of last year.

Net Loss

Net loss wasapproximately $4.66 million,or loss per share of $0.07,compared to net loss ofapproximately $3.25 million,or loss per share of $0.06,for the same period of last year.

EBITDA

EBITDA wasapproximately $7.18 millionfor the nine months ended September 30,compared toapproximately $2.69 millionfor the same period of last year.

Note 1: Non-GAAP Financial Measures

In addition to our U.S. GAAP results,and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with the U.S. GAAP.

Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)

For the Nine Months Ended September 30,

($ millions)

2022

2021

Net loss

-4.66

-3.25

Add: Income tax

-0.16

-4.95

Net interest expense

0.79

-0.84

Depreciation and amortization

11.22

11.73

EBITDA

7.18

2.69

Cash,Liquidity and Financial Position

As ofSeptember 30,the Company had cash and bank balances,short-term debt (including bank loans,current portion of long-term loans from credit union and related party loans),and long-term debt (including related party loans) ofapproximately $16.02million,$10.54 million and$4.69 million,compared to approximately$11.20million,$13.52million and$2.98 million,as ofDecember 31,2021.

Net accounts receivable wasapproximately $4.24million as of September 30,compared to approximately$4.87million as ofDecember 31,2021. Net inventory was approximately$4.44million as ofSeptember 30,compared toapproximately$5.84million as ofDecember 31,2021. As ofSeptember 30,the Company had current assets ofapproximately$48.43million and current liabilities ofapproximately$17.59million,resulting in a working capital ofapproximately$30.84million. This was compared to current assets of approximately $55.52 million and current liabilities of approximately $20.43 million,resulting in a working capital of approximately $35.09 million as ofDecember 31,2021.

Net cash provided by operating activities wasapproximately$7.43 millionfor the nine months ended September 30,compared to net cash used in operating activities of approximately$6.44 millionfor the same period of last year. Net cash used in investing activities wasapproximately$8.19 millionfor the nine months ended September 30,compared to approximately$12.78 millionfor the same period of last year. Net cash provided by financing activities wasapproximately$6.84millionfor the nine months ended September 30,compared to approximately$41.55 million for the same period of last year.

About IT Tech Packaging,Inc.

Founded in 1996,IT Tech Packaging,Inc. is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products),ITP produces and distributes three categories of paper products: corrugating medium paper,offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China's Hebei Province,ITP is located strategically close to the Beijing and Tianjin region,home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE American since December 2009. For more information,please visit:http://www.itpackaging.cn/.

Forward-looking Statement

This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933,as amended,and Section 21E of the Securities Exchange Act of 1934,as amended. Forward-looking statements give our current expectations,opinion,belief or forecasts of future events and performance. A statement identified by the use of forward-looking words including "will," "may," "expects," "projects," "anticipates," "plans," "believes," "estimate," "should," and certain of the other foregoing statements may be deemed forward-looking statements. These forward-looking statements are subject to a number of risks,uncertainties and assumptions,including market and other conditions. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. The Company undertakes no obligation to update any such forward-looking statements after the date hereof to conform to actual results or changes in expectations,except as required by law.

For more information,please contact:

At the Company

Email:ir@itpackaging.cn

Tel: +86 312 8698215

Investor Relations

Ascent Investor Relations LLCMs. Tina Xiao

Email: tina.xiao@ascent-ir.com

Tel: +1-917-609-0333

IT TECH PACKAGING,INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30,2022 AND DECEMBER 31,2021

(unaudited)

September30,

December31,

2022

2021

ASSETS

Current Assets

Cash and bank balances

$

16,017,403

$

11,201,612

Restricted cash

-

-

Accounts receivable (net of allowance for doubtful accounts of

$61,270 and $69,053 as of September 30,2022 and December

31,2021,respectively)

4,236,299

4,868,934

Inventories

4,441,390

5,844,895

Prepayments and other current assets

22,795,907

25,796,640

Due from related parties

938,803

7,804,068

Total current assets

48,429,802

55,516,149

Prepayment on property,plant and equipment

1,266,120

43,446,210

Operating lease right-of-use assets,net

659,912

-

Finance lease right-of-use assets,net

1,940,586

2,286,459

Property,plant,and equipment,net

149,535,243

126,587,428

Value-added tax recoverable

2,066,239

2,430,277

Deferred tax asset non-current

11,239,637

11,268,679

Total Assets

$

215,137,539

$

241,202

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Short-term bank loans

$

5,632,553

$

5,958,561

Current portion of long-term loans from credit union

4,175,620

6,838,465

Lease liability

272,147

210,161

Accounts payable

144,213

10,255

Advance from customers

35,646

39,694

Due to related parties

727,856

727,433

Accrued payroll and employee benefits

221,530

291,206

Other payables and accrued liabilities

5,635,813

5,250,539

Income taxes payable

746,694

1,108,038

Total current liabilities

17,592,072

20,434,352

Loans from credit union

4,692,235

2,980,065

Deferred gain on sale-leaseback

73,311

155,110

Lease liability - non-current

568,952

152,233

Derivative liability

1,334,271

2,063,534

Total liabilities (including amounts of the consolidated VIE without

recourse to the Company of $17,417,813 and $17,924,475 as of

September 30,2022 and December 31,respectively)

24,260,841

25,785,294

Commitments and Contingencies

Stockholders' Equity

Common stock,50,000,000 shares authorized,$0.001 par value per

share,11,415,920 and 9,915,920 shares issued and outstanding

as of September 30,2022 and December,31,respectively.

11,416

9,916

Additional paid-in capital

90,575,421

89,016,921

Statutory earnings reserve

6,080,574

6,574

Accumulated other comprehensive (loss) income

(11,273,597)

10,496,168

Retained earnings

105,482,884

110,146,329

Total stockholders' equity

190,876,698

215,749,908

Total Liabilities and Stockholders' Equity

$

215,202

IT TECH PACKAGING,INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,2022 AND 2021

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2022

2021

2022

2021

Revenues

$

31,709,214

$

45,087,671

$

78,979,716

$

115,832,013

Cost of sales

(28,925,626)

(43,135)

(75,251,646)

(109,150,452)

Gross Profit

2,783,588

1,821,536

3,728,070

6,681,561

Selling,general and administrative expenses

(3,370,541)

(2,019,565)

(8,541,224)

(7,172,495)

Gain on acquisition

(1,759)

-

30,404

-

Loss from Operations

(588,712)

(198,029)

(4,782,750)

(490,934)

Other Income (Expense):

Interest income

7,729

12,044

16,108

28,096

Subsidy income

-

(30)

-

197,861

Interest expense

(256,678)

(281,670)

(786,597)

(844,470)

Gain (Loss) on derivative liability

(617,370)

1,938,873

729,263

2,810,913

(Loss) Income before Income Taxes

(1,455,031)

1,471,188

(4,823,976)

1,701,466

Provision for Income Taxes

(432,287)

71,388

160,531

(4,950,994)

Net (Loss) Income

(1,887,318)

1,542,576

(4,663,445)

(3,249,528)

Other Comprehensive (Loss) Income

Foreign currency translation adjustment

(11,171,156)

(819,183)

(21,769,765)

1,128,209

Total Comprehensive (Loss) Income

$

(13,058,474)

$

723,393

$

(26,433,210)

$

(2,121,319)

(Losses) Earnings Per Share:

Basic and Diluted (Losses) Earnings per

Share

$

(0.03)

$

0.03

$

(0.07)

$

(0.06)

Outstanding – Basic and Diluted

71,449,208

54,196,300

71,300

IT TECH PACKAGING,INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,2022 AND 2021

(Unaudited)

Nine Months Ended

September 30,

2022

2021

Cash Flows from Operating Activities:

Net income

$

(4,445)

$

(3,528)

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization

11,218,254

11,733,664

(Gain) Loss on derivative liability

(729,263)

(2,913)

Gain on acquisition

(32,502)

-

(Recovery from) Allowance for bad debts

(791)

20,118

Share-based compensation and expenses

1,560,000

-

Deferred tax

(1,197,630)

3,235,556

Changes in operating assets and liabilities:

Accounts receivable

146,250

(1,742,594)

Prepayments and other current assets

(422,092)

(6,918,816)

Inventories

863,170

(6,396,066)

Accounts payable

144,331

(242,357)

Advance from customers

-

(43,161)

Related parties

(149,827)

(821,943)

Accrued payroll and employee benefits

(42,738)

92,207

Other payables and accrued liabilities

1,945

522,353

Income taxes payable

(265,493)

178,903

Net Cash Provided by (Used in) Operating Activities

7,169

(6,442,577)

Cash Flows from Investing Activities:

Purchases of property,plant and equipment

(1,979)

(12,781,114)

Acquisition of land

(6,507,431)

-

Net Cash Used in Investing Activities

(8,189,410)

(12,114)

Cash Flows from Financing Activities:

Proceeds from issuance of shares and warrants,net

-

41,837,553

Proceeds from short term bank loans

602,319

-

Proceeds from long term loans

60,232

-

Repayment of bank loans

(307,182)

(154,579)

Payment of capital lease obligation

(154,212)

(135,611)

Loan repaid by a related party

6,638,923

-

Net Cash Provided by Financing Activities

6,840,080

41,547,363

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(1,264,048)

109,473

Net Increase in Cash and Cash Equivalents

4,815,791

22,145

Cash,Cash Equivalents and Restricted Cash - Beginning of Period

11,612

4,142,437

Cash,Cash Equivalents and Restricted Cash - End of Period

$

16,403

$

26,582

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest,net of capitalized interest cost

$

248,275

$

485,075

Cash paid for income taxes

$

1,287,530

$

1,523,555

Cash and bank balances

16,403

26,582

Restricted cash

-

-

Total cash,cash equivalents and restricted cash shown in the

statement of cash flows

16,582

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